I know I’m stepping out on a limb here, and I welcome anyone who wants to correct me, but I believe the research backs me up: higher-poverty schools who qualify for Title 1 funds receive them less often than they should.
Why this is so comes from several factors, including inequitable distribution across and within districts, and too-large amounts reserved for district administrations rather than used in the actual low-income schools.
Title 1 funds may be distributed, at the state’s discretion, across school districts, even though research shows that this strategy is ineffective in helping low-income students achieve.
Further, Title 1 funds may be inequitably distributed within districts. It often happens that a school may indeed qualify as a Title 1 school but does not receive funds, which are distributed to other schools or for other uses in the district instead.
I don’t know enough of the law to know if this is illegal. I don’t know enough of the law to know if a school is thereby released from any legal obligations. I do know that it feels very unfair to me.